Background of the Dispute

The Deccan Gymkhana Co-operative Housing Society is a tenant-ownership housing society. Under this model, the Society owns the land and leases individual plots to members, who in turn own the structures built on them. Plot No. 23, admeasuring 10,302 sq. ft., was originally leased in 1947. Through successive transfers, the leasehold rights and the house constructed on it came to Narayan Pandurang Kale and Sushila (Kusum) Kale.

In 1973 the Kales sold the southern portion of the plot (4,300 sq. ft.) along with a structure of 2,300 sq. ft. to Shriniwas and Indira Bagal without the Society’s permission. The Society challenged the transaction by filing Dispute No. 544 of 1975. The parties settled the matter. Under a reconveyance deed dated 3 July 1976, the Bagals returned the leasehold rights in the land to the Kales but retained ownership of the southern structure and possessory rights (vahiwat) over the 4,300 sq. ft. land. The Society approved the draft arrangement and withdrew its dispute.

Chain of Transactions Creating Dual Rights

In 1985 Manjusha Ogale purchased the leasehold rights in the entire plot from the Kales through a sale deed dated 24 January 1985. The deed expressly recognised the Bagals’ ownership of the southern structure and their possessory rights over the southern land. The Society thereafter executed a lease deed in favour of Manjusha Ogale for the whole of Plot No. 23 on 4 April 1985.

In 1991 the Bagals transferred the southern structure and the associated possessory rights to M/s. Natekar Construction LLP. The Natekars, who are developers by profession, later sought to carry out repairs and additional construction. Their civil suit seeking directions against Dattatray Ogale to sign the plans was dismissed, and the dismissal was upheld in appeal. A second appeal remains pending.

Meanwhile, Manjusha Ogale filed a civil suit in 2003 seeking declarations that she was the sole leasehold owner, that the 1991 transfer to Natekars was void, and for removal of the southern structure. That suit and the subsequent appeal were also dismissed. A second appeal is pending.

Parallel Civil Litigations and Co-operative Dispute

In 2004 Manjusha Ogale filed Dispute No. 47 of 2004 before the Co-operative Court, Pune under Section 91 of the Maharashtra Co-operative Societies Act. She sought a declaration that she was the sole leasehold owner of the entire plot and the structures thereon, that the Natekars had acquired no rights, and for possession of the southern portion. The Society was later transposed as a co-disputant and Dattatray Ogale was joined as Disputant No. 3.

The Co-operative Court dismissed the dispute in 2019, primarily on the ground of lack of jurisdiction, and also decided against the Ogales on merits. Both Manjusha and Dattatray Ogale filed separate appeals. By a common judgment dated 19 March 2022, the Co-operative Appellate Court partly allowed the appeals. It declared Manjusha Ogale the sole lessee of the entire plot and permanently restrained the Natekars from dealing with the suit property or the leasehold rights without the consent of Manjusha Ogale and the Society. It also restrained them from obstructing her. The claim for possession was rejected.

High Court on Jurisdiction under Section 91

The Natekars challenged the Appellate Court’s order in Writ Petition Nos. 5347 of 2024 and 5354 of 2024. The Ogales filed Writ Petition (Stamp) No. 9683 of 2026 seeking possession.

Justice Marne first examined the question of jurisdiction. He held that the dispute clearly fell within Section 91 of the MCS Act. The subject matter touched the business of the Society because it concerned the identity of the true lessee of Society land and the enforcement of Section 29(2) restrictions on transfer of interest without the Society’s acceptance of membership. On the parties side, the Natekars claimed through past members (Kales through Bagals). The transposition of the Society as a disputant further confirmed jurisdiction. The Court distinguished earlier Division Bench rulings dealing with pure landlord-tenant disputes in tenant-ownership societies and held that the ratio of those cases did not apply here.

Manjusha Ogale Declared Sole Lessee

On merits, the High Court confirmed that Manjusha Ogale is the sole lessee of the entire plot of 10,302 sq. ft. The 1976 reconveyance extinguished any leasehold rights the Bagals had in the land and restored them fully to the Kales. The 1985 sale deed and the subsequent Society lease transferred the complete leasehold interest to Manjusha. Ownership of the southern structure and mere possessory rights over a portion of the land did not create any leasehold interest in favour of the Bagals or the Natekars.

Restraint on Natekars from Dealing with the Plot

The Court upheld the permanent injunction against the Natekars. Even as owners of the southern structure, they have no independent right to redevelop the land, reconstruct the existing building, or put up additional construction without the consent of the lessee and the Society. The covenants in the 1976 reconveyance permitted only necessary alterations and better enjoyment of the existing structure; they could not be read as authorising wholesale redevelopment that would effectively create rights in the land. Any such interpretation would defeat the very purpose of the reconveyance, which was to restore the full leasehold interest to the Kales.

Rejection of Possession Claim

The Ogales’ petition seeking possession of the southern structure was dismissed on two independent grounds. First, there was gross and unexplained delay of nearly four years in challenging the March 2022 Appellate Court order. Second, on merits, the Ogales had purchased the leasehold rights in 1985 with full knowledge of the Bagals’ retained ownership of the southern structure and possessory rights. Their own sale deed expressly recognised those rights. The Bagals (and later the Natekars) had paid valuable consideration for the structure. Moreover, the Ogales’ earlier civil suit seeking similar reliefs, including removal of the structure, had already been dismissed. Section 29(2) assisted on the question of jurisdiction but could not justify ouster in these peculiar facts. The Society itself had not pursued any claim for eviction.

Court’s Observations on Dual Ownership

Justice Marne noted that the arrangement created an incongruous situation in a co-operative housing society: the land is leased to a member while part of the structure is owned by a non-member who can never be admitted to membership. Such dual ownership, the Court observed, is ordinarily undesirable and produces serious difficulties in management. In the present case, however, both sides had knowingly accepted the arrangement. The Natekars took a commercial risk by purchasing only the structure without any leasehold interest in the land. The Ogales took a corresponding risk by buying the lease with full knowledge of the existing rights. Both sides must now live with the consequences.

Final Order

Writ Petition Nos. 5347 of 2024 and 5354 of 2024 filed by the Natekars and Writ Petition (Stamp) No. 9683 of 2026 filed by the Ogales were dismissed. There shall be no order as to costs. The practical position that emerges is that Manjusha Ogale remains the sole lessee of the entire land, while the Natekars continue to own and possess the southern house of 2,300 sq. ft. (subject to the pending second appeal), but with a clear fetter that they cannot deal with or redevelop any part of the plot without the consent of the lessee and the Society.

The judgment brings finality to the co-operative proceedings while leaving the pending second appeals in the civil side to take their own course.

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